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Source : http://www.networkcomputing.in
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last activity : 07 06 2010 20:18:04 +0000
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The IT adoption among automobile component manufacturing firms in India is low. While policy initiatives to encourage adoption have been explored, it is equally important to understand the process of IT adoption by firms along with the constraints faced by them.In order to increase IT penetration, it is vitally important to understand the IT adoption challenges faced by the manufacturing industry firms and especially the SME segment. Developing this understanding is crucial to ensure that IT investments by the firms are deployed where they can result in the greatest impact on a firm’s competitiveness and help the firm to derive positive outcomes from the IT investments.
The Indian Auto Component Industry has been amongst the drivers of the renaissance in India’s manufacturing sector, and given its strong performance over the last few years, it is rightfully considered a ‘sunrise’ sector of the Indian economy. Years of sustained efforts by the auto component firms and a pro-active government policy framework have transformed a relatively small and unsophisticated domestic industry into one with world-class manufacturing practices and a global footprint.
It is with this aim that NASSCOM took this this study. It wants to bring an understanding of IT adoption thresholds, challenges and processes in the different segments of the Indian auto component sector. This has been utilised to develop IT adoption strategies based upon the manufacturing capabilities of the different segments of the Auto Component Industry.
The study stated that the diversity in the manufacturing sector is very high and apart from differences in firm size, sector specific peculiarities can also play a role in the processes of IT adoption. While policy initiatives to encourage adoption have been explored, it is equally important to understand the process of IT adoption by firms along with the constraints faced by them.
The report cites that different firms appear to be devising differing strategies for IT adoption and size of the firm seems to be defining the trajectory that a firm will adopt for IT adoption. Firms are at very different levels of IT implementation and the IT strategy of many firms is not based on a judicious process improvement strategy.
Supply chain management (SCM) has been ranked as the most critical challenge by business unit (BU) heads. Some of the other challenges include fluctuations in raw material costs, meeting customer demands for product quality and timelines and procurement of raw materials, reiterating the importance of the supply chain.
Quick access to reliable business information is a key bottleneck as the auto component firms possess disparate systems including manual paper based processes that lead to disconnect amongst the supply chain constituents impeding real-time decision making and resulting in ad-hoc sources of information which further exacerbate the problem of availability of accurate data.
The three most critical business processes identified by the firms are
The most common measure of IT effectiveness, amongst the auto component manufacturers is increased productivity. Increased customer satisfaction, is also a key measure for evaluating IT effectiveness by auto component manufacturers. However, in many firms none of the measures that were mentioned are actually used to find out the IT effectiveness.
The firms are undertaking IT investments to integrate the firm’s production facilities with the other constituents of the supply chain, so that real time accurate information on the inventory, production schedule and materials is available as and when required. Many auto-component firms have deployed intranets which are made available to all the relevant in-house business functions and enable effective planning and scheduling.
I hope this article certainly educates the top management of Automotive manufacturing industries, the importance of IT adoption in this sector.
The Indian Auto Component Industry has been amongst the drivers of the renaissance in India’s manufacturing sector, and given its strong performance over the last few years, it is rightfully considered a ‘sunrise’ sector of the Indian economy. Years of sustained efforts by the auto component firms and a pro-active government policy framework have transformed a relatively small and unsophisticated domestic industry into one with world-class manufacturing practices and a global footprint.
It is with this aim that NASSCOM took this this study. It wants to bring an understanding of IT adoption thresholds, challenges and processes in the different segments of the Indian auto component sector. This has been utilised to develop IT adoption strategies based upon the manufacturing capabilities of the different segments of the Auto Component Industry.
The study stated that the diversity in the manufacturing sector is very high and apart from differences in firm size, sector specific peculiarities can also play a role in the processes of IT adoption. While policy initiatives to encourage adoption have been explored, it is equally important to understand the process of IT adoption by firms along with the constraints faced by them.
The report cites that different firms appear to be devising differing strategies for IT adoption and size of the firm seems to be defining the trajectory that a firm will adopt for IT adoption. Firms are at very different levels of IT implementation and the IT strategy of many firms is not based on a judicious process improvement strategy.
Supply chain management (SCM) has been ranked as the most critical challenge by business unit (BU) heads. Some of the other challenges include fluctuations in raw material costs, meeting customer demands for product quality and timelines and procurement of raw materials, reiterating the importance of the supply chain.
Quick access to reliable business information is a key bottleneck as the auto component firms possess disparate systems including manual paper based processes that lead to disconnect amongst the supply chain constituents impeding real-time decision making and resulting in ad-hoc sources of information which further exacerbate the problem of availability of accurate data.
The three most critical business processes identified by the firms are
- order receipt and demand management
- production planning
- order processing
The most common measure of IT effectiveness, amongst the auto component manufacturers is increased productivity. Increased customer satisfaction, is also a key measure for evaluating IT effectiveness by auto component manufacturers. However, in many firms none of the measures that were mentioned are actually used to find out the IT effectiveness.
The firms are undertaking IT investments to integrate the firm’s production facilities with the other constituents of the supply chain, so that real time accurate information on the inventory, production schedule and materials is available as and when required. Many auto-component firms have deployed intranets which are made available to all the relevant in-house business functions and enable effective planning and scheduling.
I hope this article certainly educates the top management of Automotive manufacturing industries, the importance of IT adoption in this sector.
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6 comments on "IT Adoption Low in Auto Component Manufacturing Industry"
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Commented by
S.KUMAR, Purchase/Vendor Development Manager, Auto Components Manufacturer
| 11 11 2009 06:24:21 +0000
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Commented by
sumitra dutta, Consultant, Keane
| 09 10 2009 10:43:31 +0000
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Commented by
suchita Ambardekar, Financial Analyst, Falcon Brokerage Pvt Ltd.
| 09 09 2009 17:12:21 +0000
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Rating : +2
Commented by
suchita Ambardekar, Financial Analyst, Falcon Brokerage Pvt Ltd.
| 09 09 2009 17:08:50 +0000
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Commented by
ramabalaji, Design & Developement engineer, Tvs Motor
| 09 09 2009 16:03:32 +0000
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Rating : +2
Commented by
Hardik Patel, Team Lead (Staffing and Recruitment), Rishabh Softwares Pvt. Ltd. / Rishi Infotech Pvt. Ltd
| 07 23 2008 11:13:23 +0000
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